Scalability

IN BUSINESS

A characteristic of a system, model or function that describes its capability to cope and perform under an increased or expanding workload. A system that scales well will be able to maintain or even increase its level of performance or efficiency when tested by larger operational demands. In financial markets, scalability refers to financial institutions’ ability to handle increased demands; in the corporate environment, a scalable company is one that can maintain or improve profit margins while sales volume increases.

Scale up (Verb)

Sector program evaluation

IN EVALUATING

Evaluation of a cluster of interventions in a sector within one country or across countries, all of which contribute to the achievement of a specific goal. A sector includes activities commonly grouped together for the purpose of public action such as health, education, agriculture, transport etc.

Selection bias (Noun)

IN EVALUATING

Potential biases introduced into a study by the selection of different types of people into treatment and comparison groups. As a result, the outcome differences may potentially be explained as a result of pre- existing differences between the groups, rather than the treatment itself.

Shared measurement

IN PHILANTHROPY

Shared measurement involves charities and social enterprises working on similar issues, and towards similar goals, reaching a common understanding of what to measure, and developing the tools to do so. The aim of shared measurement is to develop common indicators and tools for specific fields or interventions to help share and compare results, methods and lessons, and to identify the most effective solutions.

Not to be confused with “shared values”, “shared value” was coined in a 2006 article by Michael Porter and Mark Kramer (and Porter’s earlier work) on the link between corporate social responsibility (CSR) and competitive advantage. Porter and Kramer argued that corporate social responsibility initiatives by companies were deficient and that instead companies need to view CSR initiatives as part of their core business strategy to boost innovation and competitive advantage. The term has been adapted to Creating Shared Value (CSV) and the Shared Value Initiative, a community of leaders dedicated to finding business opportunities in addressing societal challenges.

Shared values

IN BUSINESS

Explicit or implicit fundamental beliefs, concepts, and principles that underlie the culture of an organization, and which guide decisions and behavior of its employees, management, and members.

Significance

IN GENERAL

a) The quality of being worthy of attention; importance. b) The meaning to be found in words or events. c) The extent to which a result deviates from that expected to arise simply from random variation or errors in sampling.

It is easy to confuse the generic use of “significance” with the statistical use. When statisticians or evaluators use the term significant they generally mean that the result passes a statistical test that shows the result did not occur by chance.

Small and Growing Business (SGB)

IN BUSINESS

A commercially viable business that has significant potential for expansion and social impact in the communities where it operates.

The Aspen Network of Development Entrepreneurs note two differences between SGBs and SMEs. First, SGBs are different from livelihood-sustaining small businesses, which start small and are designed to stay that way. Second, unlike many medium-sized companies, SGBs often lack access to the financial and knowledge resources required for growth.

Small and Medium Enterprise (SME)

IN BUSINESS

The categorization SME is designed to differentiate businesses with relatively small amounts of capital and/or personnel from larger organizations, particularly in relation to market segmentation, financial assistance or regulatory issues.

The criteria for defining an SME vary by jurisdiction and the defining organization and even within organizations. For example, the World Bank uses different definitions for different programs, policies, and research.

Social (Adjective)

IN GENERIC

Relating to society or its organization.

Related:
Social Enterprise,
Social impact assessment,
Social impact measurement

“Social” is often added as a modifier to other terms (e.g., value, business, investment etc.) to show consideration for impacts, costs, and benefits that affect people (individuals and communities) beyond those who are directly part of an exchange or involved in an activity. “Social” is sometimes used a shorthand for both social and environmental.

Social accounting (Noun)

IN ACCOUNTING

The preparation and publication of an account about an organization’s social, environmental, employee, community, customer and other stakeholder interactions and activities and, where, possible, the consequences of those interactions and activities. The social account may contain financial information but is more likely to be a combination of quantified non-financial information and descriptive, non-quantified information. The social account may serve a number of purposes but discharge of the organization’s accountability to its stakeholders must be the clearly dominant of those reasons and the basis upon which the social account is judged.

IN ECONOMICS

When a set of accounts is made from government figures, showing the income and spending of the various parts of the economy.

Related:
Corporate social reporting,
Corporate social responsibility reporting,
Non-financial reporting,
Social and environmental accounting,
Social audit

There is not a consensus on the definition of social accounting. It is often used as an umbrella term to include any approach to taking social and environmental effects of an organization, typically business, into consideration. Most definitions include the key themes of the link between financial and non-financial performance, qualitative and quantitative measurement of social impacts, and consideration of wider stakeholder groups beyond shareholders. Some uses include environmental impacts. A rare definition is the process of developing social accounts, which are normally called national accounts.

Social audit (Noun)

IN BUSINESS

A formal review of a company’s endeavors in social responsibility. A social audit looks at factors such as a company’s record of charitable giving, volunteer activity, energy use, transparency, work environment, and worker pay and benefits to evaluate what kind of social and environmental impact a company is having in the locations where it operates.

Under the Yunus definition, social businesses are a subset of social enterprises. The latter allows for businesses that are designed to achieve a social purpose alongside making a profit and distributing dividends. Such distribution is not allowed under Yunus’ definition of social business. A separate definition is that “social business” refers to businesses that have integrated digital technologies and social network technologies in their business models.

Social change

IN GENERAL

A change in the customs, institutions, or culture of a society, especially due to ideological or technological factors.

Social Economy

IN BUSINESS

The segment of the economy is composed of entities that aim to increase social inclusion and reduce inequalities, while simultaneously creating economic value. Social economy organizations include different types of cooperatives, associations, foundations, mutual and social enterprises (which are businesses of various legal forms using an entrepreneurial approach in order to respond to an increasing number of social and environmental challenges. While measuring them remains challenging both at national and international levels, existing evidence suggests that they are vibrant agents assisting local and national economic development and contributing to inclusive growth and shared prosperity through job creation, re-integration of vulnerable individuals to society and the labor market, and environmental sustainability.

Social enterprise

IN SOCIAL ENTERPRISING

Broadly defined as an enterprise that puts social benefit above or at least alongside profit. Traditionally these were non-profit organizations or charities with a philanthropic purpose, but they can also be structured as for-profit entities where profit is not the only overriding concern.

IN SOCIAL ENTERPRISING

Any organization, in any sector, that uses earned income strategies to pursue a double or triple bottom line, either alone (as a social sector business) or as part of a mixed revenue stream that includes charitable contributions and public sector subsidies.

IN SOCIAL ENTERPRISING

A for-profit organization that applies business principles (sale of goods and services), with the priority objective of maximizing the creation of value for society in its field of expertise. In social enterprises, the demand for profit for the owners of the organization is constrained (by statute and/or practice) by the purpose of delivering value to society. The social enterprise seeks to achieve its mission, while fairly remunerating the resources that it uses in its activities (including financial capital and human capital), seeking to identify and eliminate any negative impacts that its actions may cause.

There are some differences in definitions as to whether a business counts as a “social enterprise.” These differences include: its legal status–different countries have different definitions; the existence and priority of a social purpose; whether a social enterprise must be a nonprofit or not; and the extent to which it abides by certain principles, such as following sustainability principles and the commitment to empower the main participants in the value chain.

Social entrepreneur(ship)

IN SOCIAL ENTERPRISING

There is some debate among experts, including those offering teaching in social entrepreneurship, on what it actually is. For some, it is simply any business activity that creates social value – for example a business venture that generates environmental benefits, or provides education to underprivileged children in developing countries. For other proponents of social entrepreneurship, the focus is simultaneously on the entrepreneurship part of the term. For these people a social entrepreneur should also have launched a new company to deliver the social value.

Confusion can arise as to whether social impact assessment is used in a general way to refer to the evaluation of social impacts (see “impact assessment”) of a project or organization, or the practice of conducting social impact assessments typically prior to a planning or business decision is made. Though there is overlap, evaluators tend to use one set of methods for retrospective (ex-post) evaluations, whereas planners tend to use other methods for prospective (ex-ante) evaluations. For retrospective evaluations, social impact assessment sometimes is used interchangeably with social impact measurement, while others would separate assessment from measurement in that the former requires an evaluative judgment, whereas the latter does not.

Social Impact Bond (SIB)

IN FINANCE

A social impact bond (SIB) is a contract with the public sector or governing authority, whereby it pays for better social outcomes in certain areas and passes on part of the savings achieved to investors. A social impact bond is not a bond, per se, since repayment and return on investment are contingent upon the achievement of desired social outcomes; if the objectives are not achieved, investors receive neither a return nor repayment of principal. SIBs derive their name from the fact that their investors are typically those who are interested in not just the financial return on their investment, but also in its social impact.

Social impact management

Social impact management involves planning for impact, measuring social impacts, and taking corrective actions as needed. Confusion can arise from whether the “social” in “social impact management” refers to both social and environmental impact or just social. See “impact management”.

Social impact measurement

Social impact measurement is used simply to describe the act of measuring the social impacts of an intervention or organization. Sometimes It is used interchangeably with “impact measurement,” “impact assessment,” or “social impact assessment.” However, some note that impact assessment involves an evaluative judgment (see “assessment”) whereas measurement does not. Confusion can also arise from whether the “social” in “social impact measurement” refers to both social and environmental impact or just social.

Social Purpose Organization

Often used as an umbrella term to describe the wide variety of organizations working for a social purpose, such as nonprofits, foundations, and social enterprises.

Social Return on Investment (SROI)

IN EVALUATING

A method for measuring values that are not traditionally reflected in financial statements, including social, economic and environmental factors, which can identify how effectively an organization uses its capital and other resources to create value for the community. While a traditional cost-benefit analysis is used to compare different investments or projects, SROI is used more to evaluate the general progress of certain developments, showing both the financial and social impact of the corporation.

SROI exists within and has strong similarities to traditional cost-benefit analysis but was first documented as a distinct methodology for the social enterprise/venture philanthropy context in 2000 by REDF (formerly the Roberts Enterprise Development Fund) as a means of estimating social value creation alongside financial value and return on investment (see commentary for social value). The approach was taken up by what became the SROI Network and was later renamed Social Value International.

Social return ratio

IN GENERAL

See Social Return on Investment.

Related:
Cost-Benefit Analysis

Commentary

The original formulation of Social Return Ratio that was developed by Roberts Enterprise Development Fund (REDF) alongside its Social Return on Investment calculation, involved adding the net social benefits and business cash flow of an enterprise and dividing that by the total amount philanthropic dollars invested in the lifetime of the investment. This formulation is not widely adopted.

Social sector

No clear, authoritive definition. See commentary.

Related:
Fourth Sector,
Third sector

Commentary

Social sector is sometimes used as a synonym for the non-profit sector, charitable sector, voluntary sector (UK), or third sector. Other times it is used more broadly to include non-profits, social enterprises, philanthropic bodies, and impact investors who seek to address social problems.

Social value

IN GENERAL

Social Value is the quantification of the relative importance that people place on the changes they experience in their lives. Some, but not all of this value is captured in market prices.

IN BUSINESS/CSR

Larger concept which includes social capital as well as the subjective aspects of the citizens’ well-being, such as their ability to participate in making decisions that affect them.

IN GENERAL

Social Value refers to wider financial and non-financial impacts of programs, organizations and interventions, including the wellbeing of individuals and communities, social capital and the environment.

There is no consensus on the definition of social value but different definitions try to capture the value that people place on things, activities, and states of being that are not reflected in prices or by financial measures. In some uses social value is meant to stand in contrast to financial value (i.e., the value of non-financial benefits to an activity or intervention), in others it is meant to stand in contrast to private value (i.e., the value, positive or negative, to people who are not party to a transaction but are affected by it) or both.

Social Value International (SVI)

IN GENERAL

A global network focused on social impact and social value. Their members, comprised of organizations from 40 countries across a huge range of sectors and disciplines, share a common goal: to change the way society accounts for value.

SVI is the result of a merger between the SROI Network and the Social Impact Analysts Association.

Social venture

No clear, authoritive definition. See commentary.

Related:
Social business,
Social Enterprise

Commentary

Often used as an umbrella term to describe the wide variety of organizations working for a social purpose, such as nonprofits, foundations, and social enterprises.

Social Venture Capital

IN FINANCE

Social venture capital differs from traditional venture capital in that investors look beyond financial return and risk-reward models when deciding where to place their money. Rather than placing utmost importance on return on investment (ROI), social venture capitalists seek to invest in ventures that offer profit potential and make the world a better place through their products and services.

SRI is the practice of making socially responsible investments. “SRI”, “responsible investing”, “ethical investing”, and “impact investing” all refer to incorporating ethical concerns, social impacts, and environmental impacts in choices of investments. While sometimes used synonymously, there are differences between them. These relate to whether the filters are negative (i.e., some investments are excluded to avoid their negative effects) or positive (i.e., investments are included because they make positive contributions) and whether the filters are individualized (typically ethical investing) or systematized (typically SRI and responsible investing).

Socially responsible investment

IN FINANCE

An investment that is considered socially responsible because of the nature of the business the company conducts. Common themes for socially responsible investments include avoiding investment in companies that produce or sell addictive substances (like alcohol, gambling and tobacco) and seeking out companies engaged in social justice, environmental sustainability and alternative energy/clean technology efforts. Socially responsible investments can be made in individual companies or through a socially conscious mutual fund or exchange-traded fund (ETF).

The definition of stakeholder is consistent across fields, but in practice there may be different views as to who counts as a stakeholder, namely who has legitimate or warranted interest.

In recent years, several players in the sustainable development, social enterprise, and impact investing fields have begun to use “client,” “customer,” “user,” “end-user,” “constituent,” and “stakeholder” in place of “beneficiary” as part of a movement to recognize the individuals who benefit directly from an intervention, product, service, or investment as active participants, rather than passive recipients. Though each of these terms vary slightly in meaning, they are often used interchangeably.

Stated preference

IN ECONOMICS

Willingness to pay for something that is non-marketed, as derived from people’s responses to questions about preferences for various combinations of situations and/ or controlled discussion groups.

Strategic philanthropy

The practice of companies by which they target their respective charitable and philanthropic activities around a specific issue or cause that will in turn support their own business objectives.

IN PHILANTHROPY

Outcome-oriented, result-oriented, and effective philanthropy. This is philanthropy where: donors articulate and seek to achieve clearly defined goals; they and/or their grantees explore and then pursue evidence-based strategies for achieving those goals; and both parties monitor progress toward outcomes and assess success in achieving them in order to make appropriate course corrections.

The meaning of the term differs from whether it is used by a business considering its philanthropic giving or a foundation considering its approach to grant-making.

Summative evaluation

IN EVALUATING

A study conducted at the end of an intervention (or a phase of that intervention) to determine the extent to which anticipated outcomes were produced. Summative evaluation is intended to provide information about the worth of the program.

IN EVALUATING

Evaluation of an intervention or program in its later stages or after it has been completed to (a) assess its impact (b) identify the factors that affected its performance (c) assess the sustainability of its results, and (d) draw lessons that may inform other interventions.

There are subtle distinctions between summative and impact evaluations, such as when the evaluation takes place, the assessment of sustainability, and the inclusion of lessons learned. Such differences may not appear in practice.

Sunset provision

IN GENERAL

A stipulation that an agency or program be disbanded or terminated at the end of a fixed period unless it is formally renewed.

There is unlikely to be misunderstanding over the general concept of sustainability, but there is potential for misunderstanding in use in particular cases (i.e., in what is to be maintained at what level).

Sustainability Accounting Standards Board (SASB)

IN SUSTAINABLE DEVELOPMENT

The Sustainability Accounting Standards Board sets industry-specific standards for corporate sustainability disclosure, with a view towards ensuring that disclosure is material, comparable, and decision-useful for investors.

Sustainable development

IN SUSTAINABLE DEVELOPMENT

Development that meets present needs without compromising the ability of future generations to meet their own needs. It assumes the conservation of the natural assets for future growth and development.

Sustainable development should not be confused with sustainable growth when used by economists to describe a rate of growth that an economy can sustain indefinitely without causing a rise in inflation. Environmentalists may use sustainable growth as a synonym for sustainable development.

Sustainable Development Goals (SDGs)

IN SUSTAINABLE DEVELOPMENT

The Sustainable Development Goals (SDGs), otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.

These 17 Goals build on the successes of the Millennium Development Goals, while including new areas such as climate change, economic inequality, innovation, sustainable consumption, peace and justice, among other priorities. The goals are interconnected – often the key to success on one will involve tackling issues more commonly associated with another.

A set of 17 goals and 169 targets promoted by the United Nations to mobilize efforts by governments, non-governmental organizations, and corporations, to end all forms of poverty, fight inequalities and tackle climate change, while ensuring that no one is left behind. The SDGs are not legally binding but governments are expected to take ownership and establish national frameworks for the achievement of the 17 Goals.

System change

IN PHILANTHROPY

An intentional process designed to alter the status quo by shifting and realigning the form and function of a targeted system. Organizations, service delivery networks, poor neighborhoods, and even whole communities are often the systems targeted in these efforts.

This work is licensed under the Creative Commons Attribution-NoDerivatives 4.0 International License, that allows the copying and distribution of this material as long as no changes are made and credit is given to the authors.